Despite a repeat of Tuesday’s diverging policy direction talk, Cable managed to see firmer ground Wednesday following the release of the UK’s latest inflation report. Annualized CPI turned out at 3.2% against a 3.1% consensus forecast contrasting with BoE Governor Andrew Bailey’s forecast of a ‘sharp drop’ in the coming months.
Resistance
- 1.25728 – Moderate: 20Day Moving Average
- 1.25184/393 – Moderate: 5-month Range Floor
- 1.24822 – Minor: intraday consolidation resistance
Support
- 1.24170/235 – Minor: Yesterdays Low/ intraday consolidation floor
- 1.23716 – Minor: Lows from November 16
- 1.23382 – Moderate: Double Bottom Breakout Point
Daily charts show signs of exhaustion for GBPUSD bears with candlesticks showing a loss of momentum as we deviate well from the mean. Oscillators as well are showing signs of coming off oversold levels levels to underscore the potential for further uptick. Consider longs at the break of 1.24822 or following long tails in intraday charts for a test of the 1.25184/393 region, at which point caution is advised particularly as we see UK Retail Sales on Friday.
